President Trump asked about the idea of firing Federal Reserve Chair Jerome Powell in a meeting with lawmakers this week, CBS News has reported, a legally untested move that follows years of on-and-off criticism of the Fed leader leveled by Mr. Trump.
The president’s gripes with his handpicked Fed chair — whom he has called a “numbskull,” a “Trump Hater” and a “stubborn mule” — have largely focused on the central bank’s decision to keep interest rates relatively high so far this year, part of an inflation-fighting campaign. Mr. Trump has also taken aim at Powell’s handling of a Federal Reserve office renovation project.
Mr. Trump asked a group of House Republicans if he should fire Powell during a Tuesday night Oval Office meeting, sources told CBS News earlier this week. The president told reporters a day later it’s “highly unlikely” he’ll fire Powell, though he confirmed he spoke to lawmakers about “the concept of firing him,” and “almost all of them said I should.”
Who is Jerome Powell, and who appointed him?
Powell is the chair of the Federal Reserve’s Board of Governors.
Powell was first nominated as Fed chair by Mr. Trump during his first term, replacing Obama appointee Janet Yellen, and the Senate confirmed him in an 84-13 vote. Former President Joe Biden nominated him to a second term, keeping him in office until May 2026.
“He’s strong, he’s committed, he’s smart,” Mr. Trump said in a speech announcing his decision to nominate Powell in 2017, praising Powell’s reputation as a “consensus-builder.”
Last month, though, Mr. Trump said he initially nominated Powell because he “listened to someone that I shouldn’t have listened to, and Biden shouldn’t have reappointed him.”
Before becoming chair, Powell had served on the central bank’s Board of Governors since 2012, when he was initially nominated by former President Barack Obama.
Powell has switched between government and private-sector jobs for much of his career. He worked in investment banking in the 1980s and 1990s, interrupted by a stint as former President George H.W. Bush’s undersecretary of the Treasury. For almost 20 years starting in the 1990s, he was a partner at the Carlyle Group investment firm, according to his Fed biography.
A Georgetown-educated lawyer, Powell does not have a Ph.D. in economics, unlike some other former Fed chairs.
Does Jerome Powell have a designated term length?
Federal Reserve chairs serve for four-year terms, so Powell’s stint as chair will end in May 2026.
Members of the Fed’s seven-member Board of Governors, however, serve for 14 years, and Powell’s term as a board member ends in January 2028. Yellen resigned from the board after her term as Fed chair ended, and Treasury Secretary Scott Bessent has encouraged Powell to follow suit, though Powell’s plans are unclear.
The chair and board members are nominated by the president and confirmed by the Senate.
What does the Federal Reserve do?
The Federal Reserve is the United States’ central bank. Made up of 12 regional Federal Reserve banks and a D.C.-based Board of Governors, its responsibilities include regulating the U.S. banking system, serving as a “lender of last resort” to banks and running an instant payment system.
But one of the Federal Reserve’s highest-profile responsibilities is its role in setting monetary policy. Through its 12-person Federal Open Market Committee, which includes Powell, the Fed works independently of elected officials to influence the supply of money in the U.S. economy and the interest rates at which it’s lent out, with an eye toward keeping unemployment low and prices stable.
Those two goals — maximizing employment and minimizing inflation — are known as the Fed’s “dual mandate.” But they’re in conflict with each other. If the Fed lowers interest rates, it can boost economic growth, but it also runs the risk of overheating the economy and pushing up inflation. And if interest rates are hiked, inflation tends to cool off, but the economy slows down.
The interest rate that the Fed targets is called the Federal Funds Rate, which is what banks charge to lend money to each other overnight. But other interest rates — from mortgage rates to yields for U.S. government bonds — tend to follow closely with the Federal Funds Rate, so the Fed’s decisions impact borrowing costs for average American consumers and businesses.
Picking the right balance isn’t easy, and the Fed often faces criticism for its choices.
Under Powell, the Fed dropped its target interest rate to near 0% at the start of the COVID-19 pandemic in 2020, with the goal of averting an economic catastrophe. But after the economy recovered and inflation soared, the central bank in 2023 hiked interest rates to their highest point in decades, aiming to get inflation under control. The Fed has taken a cautious path since then, cutting rates slightly last year as inflation fell but keeping them steady so far this year.
Last month, the Fed’s rate-setting committee said it may cut rates later this year, but there are concerns that inflation — which is still above the Fed’s 2%-per-year target — could worsen. Powell has also suggested the Fed is concerned Mr. Trump’s tariffs could increase inflation.
“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell said last month.
Why is Trump unhappy with the Fed and Jerome Powell?
Mr. Trump is unhappy with the Fed’s decision to leave rates stable. For months, the president has pushed the central bank to slash rates immediately, calling Powell “Mr. Too Late.”
The president argued last month that inflation is already low enough to start cutting rates.
“If he was concerned about Inflation or anything else, then all he has to do is bring the Rate down, so we can benefit on Interest Costs, and raise it in the future when and if these ‘other elements’ happen (which I doubt they will!),” Mr. Trump wrote.
He’s not the first president to criticize the Fed for high interest rates, which make everything from car loans to mortgages more expensive and can put a damper on the economic growth that tends to make or break presidents’ popularity. But Mr. Trump has been unusually vocal.
In a mid-June post on Truth Social, Mr. Trump called Powell a “Total and Complete Moron” and urged the rate-setting Federal Open Market Committee to “override” him. While Powell is just one of 12 votes on the committee, the chair traditionally has an outsize role in its decisions. The last few decisions to leave interest rates stable have been unanimous.
Mr. Trump had similar issues with Powell during his first term, saying during an earlier interest rate-hiking campaign in 2018 that he was “not even a little bit happy with my selection” of Powell. When the Fed cut rates in 2020, Mr. Trump called Powell his “most improved player.”
Meanwhile, members of the Trump administration have pressured Powell over a yearslong renovation to the Fed’s headquarters complex. In a letter to the central banker, Office of Management and Budget Director Russell Vought called some of the features “ostentatious,” and alleged that Powell may have misled Congress about the project’s scope or made changes to the plans without getting permission from the right federal bodies.
Mr. Trump has also criticized Powell over the renovations. On Wednesday, Mr. Trump said he’s “highly unlikely” to fire Powell “unless he has to leave for fraud.” At other points, Mr. Trump has suggested Powell should resign over the project.
Powell said last year he would not resign as chair if asked to do so.
Powell defended the Fed’s handling of the project in a letter to Vought and denied allegations that it was overly lavish, saying the Fed has “taken great care to ensure the project is carefully overseen.” He also said the project has been “subject to budget approval” by board members annually. Powell added the Fed has only “made a small number of design changes to scale back or eliminate certain elements,” so no further government review is needed.
The Fed typically operates with a high degree of independence over its own budget, and legally has the power to buy and remodel office spaces in Washington, D.C., as it sees fit.
Is the Fed independent from the rest of the government? And can Trump fire Powell?
The structure of the Fed — with board members and chairs who serve across multiple administrations — allows it to make decisions without direct input from politicians.
Whether the president can fire Powell before his term ends is legally untested. Federal law says members of the Federal Reserve board can only be removed by the president before their terms end “for cause,” and the Supreme Court found in 1935 that Congress is allowed to limit the grounds on which the president can fire members of independent federal boards.
In May, the high court did allow Mr. Trump to fire members of federal labor boards, but it exempted the Federal Reserve, which it called a “uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”
Any attempt to fire Powell before his term ends could also roil financial markets, analysts and lawmakers from both parties have warned. Mr. Trump acknowledged this risk Wednesday, telling Just The News in an interview, “They say it would disrupt the market if I did.”
At some points in the Federal Reserve’s 112-year history, including during World War II, the central bank has been more beholden to the needs of the Treasury. But the Fed has operated more independently since 1951, when a public disagreement between the Fed and the Truman administration led the Treasury to agree to let the central bank set interest rates on its own.
There’s nothing preventing the president from publicly expressing his views about the Fed, though, as several of Mr. Trump’s predecessors have. During his campaign last year, Mr. Trump said he should have “at least [a] say” in the moves made by the central bank.
“In my case, I made a lot of money, I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve, or the chairman,” Mr. Trump said in an August 2024 press briefing.
White House press secretary Karoline Leavitt said in April that Mr. Trump “has the right to express his displeasure with the Fed, and he has the right to say he believes interest rates should be lower.”
